Economic consequences of parenthood : evidence for Argentina

Abstract

Establishing a causal relationship between parenthood and individual economic outcomes, such as education or employment, is complex due to endogeneity concerns. To study this relationship, I exploit a novel source of exogenous variation: contraceptive failure. For the case of Argentina, I compare those who used contraceptive methods at the time of having a child (i.e., experienced a failure) vs. those who also used these methods, but did not have a child. The source of information allows me to distinguish pregnancies that resulted in births from those that were interrupted (spontaneous or induced abortions). The findings show that motherhood significantly reduces the chances of working (-17% in relation to the control group) and of having reached some type of higher education -tertiary or university- (-5%). This result is partially reversed in the case of fatherhood: fathers have a greater chance of working (6%). In both cases, the impact is reduced as the age of the child increases. In intergenerational terms, the results show less investment in child care in cases of unplanned children. This has important implications for health and gender policy.